Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; higher
C. lower; higher
D. higher; potential
Answer: D
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Table 7-5 Stereos produced 0 1 2 3 4 5 6 Total cost (in $) 200 325 410 475 550 660 825 Table 7-5 shows short-run total cost figures for a stereo manufacturer. At what output level does short-run average total cost reach a minimum?
A. 2 B. 3 C. 4 D. 5
The Long-Run Phillips Curve is vertical, suggesting that ________
A) allowing inflation to rise will not succeed in keeping unemployment low B) changes in unemployment have no lasting impact on inflation C) shifts of the short-run Phillips curve impact inflation, but have no effect on unemployment D) all of the above E) none of the above
The cross elasticity of demand for substitute products must:
a. be greater than one. b. be less than one. c. be zero. d. exceed zero. e. be negative.
An example of stimulus spending by the government might be:
A. increase in government purchases of new cars. B. the monthly payments a government agency makes to its employees. C. a cut in the government budget aimed at spurring private consumption. D. the FED engaging in open market sales of securities.